Note: This op-ed was originally published on responsible-investor.com on June 16, 2017. See the related report.
The take-up of circular economy principles in business is rising fast; and responsible investors are backing it.
by The Investment Integration Project
PGGM, the second largest pension fund in the Netherlands, has traditionally invested in all the usual money-makers, like oil companies, big pharma, and corporate giants. But in 2015, it took a dramatic step. By the end of that year it had allocated €8.9bn in what it calls “solutions for sustainable development.” In other words, it put billions into investments with the express intention of addressing systems-level social and environmental challenges: building housing for low income communities, developing water-saving technologies and new energy infrastructure, all while still earning competitive returns.
This solutions-oriented way of investing wasn’t a one-off project, nor was it simply meant to be good public relations (although it was). It is part of an increasingly popular approach to return a reasonable profit while simultaneously making a positive impact on the world. Specifically, PGGM has focused its solutions-oriented investments on climate change, water and food, and healthcare; mirroring its beneficiaries’ career concerns.
At the same time, PGGM has joined a group devoted to growing the circular economy: the practice of finding clever ways to more intelligently use our limited (and often costly) resources like energy, land and materials. This group, the Circular Economy 100, convenes businesses, emerging innovators and governments to collaborate and share insights on how to move away from the traditional waste-ridden linear economy toward one that is restorative by design.
